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23 January, 02:50

On December 31, 2020, Coolwear, Inc. had a balance in its prepaid insurance account of $53,400. During 2021, $91,000 was paid for insurance. At the end of 2021, after adjusting entries were recorded, the balance in the prepaid insurance account was $44,500. Insurance expense for 2021 was: Multiple Choice A.$144,400. B. $8,900. C.$99,900. D. $91,000

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  1. 23 January, 03:16
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    Option "C" is the correct answer to the following statement.

    $99,900

    Explanation:

    Given:

    Balance on 31 Dec 2020 = $53,400

    Opening balance on 1st Jan 2021 = $53,400

    Amount paid during the year = $91,000

    Closing Balance on 31 Dec 2021 = $44,500

    Insurance expense for 2021 = ?

    Computation:

    Insurance expense for 2021 = Opening balance + Amount paid during the year - Closing balance

    = $53,400 + $91,000 - $44,500

    = $144,400 - $44,500

    = $99,900
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Home » Business » On December 31, 2020, Coolwear, Inc. had a balance in its prepaid insurance account of $53,400. During 2021, $91,000 was paid for insurance.
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